Dividends | July 2018

I am finally passing the $400 mark towards my goal of $750 in annual dividends and I feel as though I am in the home stretch.

Here is my takeaway for not making June and July purchases.

It’s okay. The world will not end, and I still get paid. My account still grows even if I am unable to add new money. I still get pay raises (as my dad would say), even though I do not technically work outside the home for a salary. And lastly, I got a bigger pay raise this month than my husband, hahaha. Thank you RBC! (I hold RBC in another account which I will post on later in September)

Thanks! I hope you’re enjoying all the latest dividend increase being announced too 🙂

I have a love/hate relationship with RRSPs, hahaha… I should write a post about it. And you’re right, they’re great for American stocks (no withholding tax). But if you earn less than 45k you have very little contribution room (plus, I stay at home), and at tax time it won’t push you into a lower tax bracket since you are already in the lowest.

Also I’m a bit jaded, both my parents died before they converted their RRSPs to RRIFs, and their account was taxed in the highest tax bracket for Ontario (53%-ish). When they originally contributed, income taxes were lower and the refund they would have received did not offset the amount the government later took from their estate.

Yada, yada, yada. I hope I’m not boring you. 😀 I guess it shows me, I need to be better prepared when it comes to my future estate planning.

Good point! And there is a two-fold reason why my Enbridge is un-registered. The first part is that when I first bought it, I was young and didn’t have much money ($10 bucks here, $20 bucks there). At the time, TFSAs hadn’t started and in order to have a self-directed RRSP at a online brokerage the initial deposit was WAY out of my league (some where as high as $50k). Even today, some margin accounts still require a deposit of $1000. I ended up getting 1 physical share of Enbridge registered in my street name and I enrolled it in a DRIP with free optional cash purchases at what is now AST in Montreal. This allowed me to contribute the minimum optional cash purchase with no commission fees. Also, if I didn’t have the money one quarter, the transfer agency didn’t charge inactivity fees. (I actually got hit with these fees by surprise last year in my Questrade TFSA because I wasn’t considered ‘active’ enough)

The second part of not transferring it, is that in my Questrade TFSA they only allow your dividends to buy whole shares and not fractional shares to the third decimal unlike the transfer agency. My shares grew more quickly even when I didn’t contribute much. Also, because I am a stay-at-home mom, my only income that I claim at tax time are my dividends.

So, my strategy right now is to leave Enbridge where it is, focus on my TFSA and, if need be, contribute to my husband’s RRSP and TFSA. Really, the small amount in taxes that I pay on my Enbridge is not enough (in my opinion) to warrant the trouble of transferring it into my TFSA.

I agree with Rob…. count it all. Besides, it moves you closer to your goal. Happily, it looks like you can achieve your goal even without it.
Glad to see you are all caught up on the dividend income reports now. The bright side to the catch up is that it seems like your annual dividend income is growing more quickly! 🙂

Awesome job, getting closer to that goal and can’t wait to see you reach that milestone!

I was going to ask the same question about the RRSP, but you’ve addressed that and I think the important thing is having a plan that works for you and your situation–and that you definitely seem to be doing.